Disney Shut Down Its Whole Games Publishing Division

A whole mess of people are out of a job this week, as Disney has shut down the arm of the company responsible for its toys-and-video-games endeavor, Disney Infinity.

The announcement went out as part of a Disney earnings call, and means that Disney is shutting down Avalanche Software, the studio responsible for Disney Infinity, and laying off about 300 developers in the process.

Disney Infinity is Disney’s answer to Activision’s Skylanders, a “toys-to-life” game that’s dependent on players continually buying physical character figurines to expand the video game. Basically, you buy a “starter kit” of sorts for Disney Infinity, and then buy figurines of different characters—put the figurines on a “portal” accessory that plugs into your game console, and the characters become playable in the game. With the combined might of every movie Disney ever released, plus Star Wars and the Marvel Cinematic Universe, it seemed like the company had a money-printing machine on its hands.

But apparently, that’s not the case. As Disney CEO Bob Iger noted on the call, “the risk caught up with” Disney—meaning that Infinity was pretty expensive to create and not necessarily returning enough money to justify that expense. Iger also made it sound like, to Disney’s point of view, being in the publishing bsuiness is a little too volatile to justify the expense.

What’s probably most telling about Disney’s move to shut down Infinity and its gaming business is that the toys-to-life idea isn’t sustainable long-term, successful as it once seemed to be for Disney, Activision and other companies, like Nintendo and Warner Bros. The costs are high and gamers are fickle, and games like Skylanders and LEGO Universe are probably going to have to be careful about keeping players on the hook without overtaxing their wallets. Toys get expensive, and so do shelves to put them all on.